As momentum builds toward a second round of talks between the United States and Iran aimed at ending the war, a central issue has emerged as one of the points of contention. Those are frozen assets that Iran holds in other countries.
Iran’s economy has been in a slump for many years due to sanctions imposed on the country by the United States and other countries. These sanctions have been in place since 1979, first against American hostages held at the American embassy in Tehran after the Islamic Revolution, and later strengthened against Iran’s nuclear and ballistic missile programs. These measures limit the Iranian government’s ability to access its assets, such as oil sales revenue, which are frozen in foreign banks.
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On April 10, before the first round of ceasefire talks began in Pakistan, Iranian Parliament Speaker Mohammad Berger Ghalibaf said in X that Iran’s frozen assets (profits frozen in foreign banks) need to be released before negotiations can begin.
A day after ceasefire talks in Pakistan’s capital, Islamabad, some reports emerged suggesting that the US government had agreed to unfreeze at least some Iranian assets stored abroad. However, the US government quickly dismissed these reports and claimed that these assets remained frozen.
Tensions are expected to flare up again with talks expected to resume in the coming days before the current ceasefire between the United States and Iran in the region expires in the early hours of April 22nd.
But how many Iranian assets are frozen, why doesn’t the Iranian government have access to them, where are these funds now, and why are they important to Iran?
How large are Iran’s frozen assets?
The exact amount of Iran’s frozen assets is unknown, but official Iranian reports and experts put the total amount of Iranian assets frozen abroad at more than $100 billion.
Frederick Schneider, a non-resident senior fellow at the Middle East Council on Global Affairs, told Al Jazeera that these assets are about four times the amount Iran earns annually from hydrocarbon sales.
“This is a huge amount, especially for a society that has suffered under decades of U.S.-led sanctions,” he said.
But he added that even if the U.S. released these assets, it remained unclear whether it would be conditional on how they would be used.
“There is no question that Iran is in dire need of assets, but given its very chaotic history of sanctions and the lack of expertise on the U.S. side to negotiate the details, Iran is skeptical,” he said.
Jacob Lew, former US Treasury secretary under former US President Barack Obama, said in 2016 that even if all sanctions were lifted, Iran would not be able to access all of its assets frozen abroad. At the time, Iran had agreed to a landmark deal with the United States and other countries that capped its nuclear program in exchange for sanctions relief.
In reality, Iran would only be able to access about half of the frozen assets at most, as the rest has already been used to repay committed investments and loans, Lu told Congress.
Currently, the Iranian government’s main demand in ceasefire negotiations is to release at least $6 billion in frozen assets as a confidence-building measure.
What are frozen assets?
When the funds, property, and securities of an individual, a company, or a country’s central bank are temporarily held by the authorities of another country or an international organization, this constitutes an asset freeze.
This limits the owner’s ability to sell these assets due to sanctions, court orders, or other regulatory reasons.
Assets may be frozen by courts, other national or international organizations, and banking institutions. Officially, countries announce that they freeze the assets of other countries or companies due to accusations of criminal activity, money laundering, or violations of international law.
But critics of the practice point out that it is used selectively to target Western rivals. Israel, for example, has been repeatedly accused of committing rights violations, waging illegal wars, and practicing apartheid. However, its overseas assets have not been frozen by any country.
By contrast, countries such as Iran, Russia, North Korea, Libya, Venezuela, and Cuba have had their assets frozen by foreign governments. The common thread that unites them all is that they oppose, or have opposed, US domination of the international order.
Why is Iran freezing its assets?
The first asset freeze occurred in November 1979, when then-U.S. President Jimmy Carter said Iran “posed an extraordinary and extraordinary threat to the national security, foreign policy, and economy of the United States,” according to U.S. Government Archives.
At the time, Iranian students were holding 66 Americans hostage at the U.S. Embassy in Tehran.
Then-Treasury Secretary William Miller told reporters that Iran had less than $6 billion in liquid assets at the time, the largest component of which was $1.3 billion in Treasury notes held by the New York Fed. In 1981, the Algiers Agreement between the United States and Iran, brokered by Algeria, provided for the United States to unfreeze a significant portion of these assets in exchange for Iran to release the 52 American prisoners still held in Tehran at the time.
But over the next few years, relations between the United States and Iran continued to deteriorate, with the United States becoming concerned about Tehran’s nuclear program.
Iran has always maintained that its uranium enrichment program is for civilian energy purposes only, even though it has enriched uranium far beyond the standards required for the program.
Israel and the United States have repeatedly accused Iran of enriching uranium to develop nuclear weapons. The United States and its allies, particularly in Europe, have imposed multiple sanctions against Israel, even though Israel, widely believed to be the only country in the Middle East to already have secretly produced nuclear weapons, is not subject to such scrutiny.
In 2015, Iran signed an agreement called the Joint Comprehensive Plan of Action (JCPOA) with world powers, which was negotiated by the United States under President Barack Obama. Under the deal, the Iranian government agreed to scale back its nuclear program and thus regained access to most of its foreign assets at the time.
But in 2018, during his first term as president, Donald Trump unilaterally pulled the United States out of the deal, reimposed sanctions on Iran, and refrozen foreign assets.
In 2023, the United States and Iran agreed to a prisoner exchange agreement in which Iran would release five American and Iranian nationals in exchange for the United States to release several Iranians imprisoned in the country and give Iran access to billions of dollars in frozen funds. The funds in question were $6 billion in oil revenue frozen in South Korea due to U.S. sanctions.
Under the plan, funds would be transferred to and supervised by Qatar. But the following year, US President Joe Biden imposed new sanctions on Iran in response to missile and drone attacks against Israel, and Iran again lost access to these assets in Doha.
In addition to the United States, the European Union also froze some of Iran’s central bank assets, citing Iran’s alleged human rights abuses, nuclear noncompliance, terrorism, and accusations of a drone program supporting Russia’s war against Ukraine.
Which country holds Iran’s frozen assets?
Iran’s frozen assets are held by multiple countries.
The exact amount each country currently holds is unknown, but Iranian media has previously reported that Japan, another important Iranian oil customer, has about $1.5 billion, Iraq about $6 billion, China at least $20 billion and India $7 billion.
Additionally, the United States holds approximately $2 billion in directly frozen Iranian assets, and EU countries such as Luxembourg hold approximately $1.6 billion.
Qatar holds about $6 billion, an amount that was transferred from South Korea to pay Iran but was later blocked by the United States.
Why is unfreezing assets important for Iran?
Iran’s economy is in crisis, with decades of sanctions restricting oil exports and slowing its ability to attract investment and modernize its industry and technology.
Rising inflation and a fall in the value of the country’s currency, the rial, sparked mass protests in December and January that later evolved into a mass movement challenging the ruling class. Thousands of people have been killed in crackdowns by security forces. Iranian officials claim that “terrorists” funded and armed by the United States and Israel were responsible for the killing. President Trump recently acknowledged that the United States had given weapons to some demonstrators.
Against this backdrop, frozen assets lock up Iran’s readily available cash, with $100 billion equivalent to nearly a quarter of the country’s GDP.
Roxanne Furman-Farmain, academic director and lecturer in international politics at the University of Cambridge, specializing in Iran, told Al Jazeera that unfreezing Iranian assets is important for the country.
“It would mean that money earned in hard currency, for example from the sale of oil, could be transferred back to the home economy. It would also be able to control currency fluctuations, thus avoiding the vulnerability to currency fluctuations that led to the protests in December 2025, for example,” she said.
He noted that critical industries such as oil fields, water systems and power grids face infrastructure decline and all would benefit from upgrades if the country had free access to the assets. With this asset, Iran could start making improvements by disbursing funds to foreign companies and its own industries, he said.
“Clearly, Iran also needs to rebuild after the war, and the assets released will soon make that process faster and more efficient,” she said.
“Access to frozen funds will also accelerate much-needed economic growth, improve relations between government and people, and begin the long process of rooting out the corruption that is inevitable in the sanctions regime,” she added.
York University political scientist Chris Featherstone told Al Jazeera that the US decision on whether to unfreeze Iranian assets would also send an important diplomatic message.
“Internationally, unfreezing assets could signal a reduction in US pressure on Iran’s economy,” Featherstone said. “This could increase the engagement of other international actors and regional neighbors and develop trade and integration.
“But given the Trump administration’s unpredictable approach to international politics and the war with Iran, this could also be interpreted as further evidence of how difficult it will be for America’s allies and adversaries to predict the Trump administration’s next actions.”
